RBI’s project- specific loan restructuring good for stressed realty

RBI’s recent move to clear recast of FY21 loans, based on projects, will prove beneficial  for developers across the real estate spectrum.

 The RBI has prescribed the eligibility of restructuring of FY 21 loans on the basis of account being standard on March 1, 2020. However, the actual loan to be considered for resolution is the one that is outstanding as on the date of invocation of the resolution framework. The basic requirement of inter- creditor agreement among all lenders provides flexibility to banks to rejig loans on project basis. Earlier lenders were not able to extend loans to stuck projects due to corporate default by realtors.

 Says Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global and Chairman, Assocham National Council on Real Estate, Housing & Urban Development, ” It’s a positive move by RBI to restructure loans impacted by Covid 19 on project basis as financial and operating parameters are project specific. This will benefit all -big and small developers of stressed projects. Thousands of housing projects with more than 6 lakh units are stuck/incomplete. Especially, the RBI move will be a big relief for those projects stuck for want of last mile funding. This will help in the completion of a large number of stuck projects. This will, in turn boost home buyers sentiment, helping in the revival of the sector.

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